Alliance Data Systems Corp. will continue providing private-label credit cards to Stage Stores Inc. and will collaborate to develop and launch a simplified loyalty program under a new long-term contract with the retailer.

Houston-based Stage Stores operates 836 stores in 40 states under the Bealls, Goody's, Palais Royal, Peebles, Stage and Steele's trade names. (It is not affiliated with Beall's Inc.)

Under the terms of the agreement, Dallas-based Alliance Data's Retail Services business will continue to provide a full suite of private-label credit card services to drive sales and brand loyalty among Stage Stores' customers.

Alliance Data has worked with Stage Stores since 2003, supporting its private-label program and its VIP rewards program, Bob Aronson, Stage Stores vice president of investor relations, said in an interview. Though he declined to say specifically what the company hopes to improve in its loyalty program, Aronson says the goal is to "enhance the benefits and incentives exclusive to the cardholders."

"You can always try to improve what you have, and clearly we want to take care of our customers and reward card users," he says, noting the retailer has more than 1 million credit cardholders.

An Alliance Data representative could not be reached for comment. "We consider our private-label credit card program to be a key component of our retailing concept, and we place a high degree of importance on the relationship that we have with our cardholders," Michael Glazer, Stage Stores president and CEO, said in a press release Aug. 13.

In the company's annual report, Stage Stores cites the importance of the private-label card program in enhancing customer loyalty and enabling the company to identify and regularly contact its best customers. The program also creates a comprehensive database that enables Stage Stores to implement detailed, segmented marketing and merchandising strategies for each store, the company said.

Under the existing card program, the company's most active charge customers are awarded a bronze, silver or gold VIP card based on their level of annual purchases. Depending on their level, cardholders receive such benefits as discounted or free gift-wrapping, special promotional discounts and invitations to private "VIP Only" sales. New cardholders receive a 10% discount the first time they use their new card, the annual report says.

To encourage its employees to focus on getting customers to open new company credit card accounts, Stage Stores provides increasing incentive award payments based on the number of new private-label credit card accounts they activate. The penetration rate for the company's private-label credit card was approximately 32% last year and has remained consistent the past three years, according to Stage Stores' 10K filing with the Securities and Exchange Commission.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry